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"It is impossible to resist the price storm now," says Sy, "I work on Sunday to send extra
money to my wife and children in the countryside."
Another worker, Pham Thi Vy, also earns about VND2 million a month and uses almost
all of it to pay for food, electricity, water and her brother's school tuition.
Vy says she recently moved into a 10q.m room with a friend to save money.
As of mid-August, the monthly price for a room near the industrial parks and export
processing zones in HCM City increased by between VND50,000 (US$2.5) and
VND100,000 ($5.1).
Prices for foods like rice, cooking oil, meat, and vegetables have also increased to
dizzying levels.
Nguyen Thi Nhung, an employee at a State enterprise in Ha Noi, jokes that shopping in
supermarkets is harder than performing magic tricks.
"I have very little money and everything is expensive and all prices are increasing,"
Nhung says.
Economist Ngo Tri Long, former deputy head of the Market and Price Research Institute,
attributes rising prices to multiple causes.
He says the exchange rate rise between Vietnamese dong and the US dollar is one factor.
Long says Viet Nam has been exposed to dollarisation (the holding by residents of
foreign currency), meaning the impact of the rate adjustment may have been even
stronger once imported goods are sold and people convert dollars to dong.
"The rate adjustment has devaluated the dong, causing increased input costs to produce
goods," Long says.
The economist also attributes price rise to the loss of consumer confidence and to the
trend among traders of hoarding rice to export to neighbouring countries, a situation Long
says will immediately affect prices.
According to deputy director of the Ha Noi Industry and Trade Department Nguyen Van
Dong, the total commodity circulation in February will be about VND19.2 trillion in
value ($960 million) or an increase by between 20 and 22 per cent compared with the
earlier months.
He says Ha Noi will have to import pork from other provinces because it has met only 70
per cent of the city's demand.
The inability to meet consumption demand will encourage hoarding or the spread of false
information to raise prices and earn illegal profits, says deputy head of Ha Noi Market
Watch Vuong Tri Dung.
To reduce pressure, Ha Noi authorities have decided to lend enterprises VND400 billion
($20.5 million) with preferential interest rates to help them stock goods for the lunar New
Year period.
Phong suggests the State satisfy demand for foreign currencies among enterprises and
apply drastic measures to stabilise the price of products like electricity, coal, water, and
oil and gas. — VNS
Financial Reporting Framework in Vietnam (updated September 2009)
All domestic companies, listed and unlisted, are currently required to use the Vietnamese
Accounting Standards (VASs), which have been developed by the Ministry of Finance.
Generally, the VASs were based on IASs that were issued up through 2003, though some
modifications were made to reflect local accounting regulations and environment. None
of the IASB's amendments to IASs nor new IFRSs have been adopted.
VAS 01 Framework
VAS 02 Inventories
VAS 06 Leases
Vietnam has begun to adopt of a body of Vietnamese Accounting Standards (VAS) that
are based on, though not identical to, the related International Accounting Standards
IAS). The following standards, which have been approved by the Minister of Finance and
are required to be applied to enterprises of all economic sectors throughout Vietnam,
replace the respective accounting regulations. Specific accounting regulations will be
amended and supplemented in accordance with these standards. Standards Nos. 02, 03,
04, and 14 are effective for 2002 reporting; the remaining standards are effective for 2003
reporting:
• VAS 01 Framework
• VAS 02 Inventories
• VAS 03 Tangible Fixed Assets
• VAS 04 Intangible Fixed Assets
• VAS 06 Leases
• VAS 10 The Effects of Changes in Foreign Exchange Rates
• VAS 14 Revenue and Other Incomes
• VAS 15 Construction Contracts
• VAS 16 Borrowing Costs
• VAS 24 Cash Flow Statement
Click here to download a Comprehensive Summary of the New VAS (PDF 187k)
prepared by VACO-Deloitte Touche Tohmatsu. The Ministry of Finance is working to
develop additional VAS.
April 2001 Update
In an effort to further develop the auditing activities in Vietnam, the Ministry of Finance
(MOF) has adopted the following new auditing standards, with effect from 15th January
2001:
On the accounting side, MOF is developing a new accounting law which, if enacted, is
planned to go into effect as planned early next year. MOF has considered the country's
commitment to liberalising financial services such as insurance, auditing, and accounting
in drafting the new law. The new law would replace the 1998 ordinance on accounting
and statistics, which many in the business sector believe is not suitable to economic
activities of a market economy.
The Vietnamese Standards on Accounting and Auditing Committee of the MOF has
completed reviewing the first four drafted accounting standards, covering inventory,
tangible assets, intangible assets, and revenue. Comments obtained from the members of
the Committee are currently being considered. It is envisaged that these accounting
standards will be finalised in the second quarter of 2001.
Decrees issued by the Ministry of Finance (MOF) provide some guidance on accounting
standards that companies doing business in Vietnam must follow. Domestic companies
must follow the Vietnamese Accounting System (VAS). Foreign companies, with very
few exceptions, are also required to follow this accounting system. In line with the
MOF's intention to implement a uniform accounting system, MOF issued a letter
confirming its position to require that all foreign companies that have not applied VAS to
start applying VAS from 1 January 2001. Recently, a dialogue between MOF officials
and foreign companies' representative is scheduled to take place in early October to
discuss the possibility of extending the implementation beyond 1 January 2001. MOF
plans to have national accounting standards that are in line with IAS.
The Accounting and Auditing Department of the MOF is currently drafting its first four
accounting standards, which it expects to issue before the end of the year. Those four
standards will cover accounting for inventory, tangible assets, intangible assets, and
revenue. MOF plans to complete and issue all accounting standards that are in line with
IAS by the year 2003.